Investing.com-- Most Asian stocks drifted higher on Wednesday as a severe rout in technology shares, amid concerns over DeepSeek- a new Chinese artificial intelligence model, now appeared to be clearing.
Australian markets were the best performers in the region, rising to a near two-month high as softer-than-expected consumer price index inflation data sparked bets that the Reserve Bank of Australia will cut interest rates soon.
Asian trading volumes were muted on account of market holidays in China, Hong Kong, Taiwan, Singapore, and South Korea, for the Lunar New Year. Chinese markets will be closed for the remainder of the week.
Regional markets took a positive lead-in from Wall Street, where heavyweight technology stocks rebounded sharply from steep losses logged on Monday. But U.S. stock index futures fell in Asian trade, with investors remaining cautious before the conclusion of a Federal Reserve meeting later in the day, where the central bank is widely expected to keep rates steady and strike a hawkish chord.
Focus is also on fourth-quarter earnings reports from several Wall Street majors due this week, with Microsoft Corporation (NASDAQ:MSFT), Tesla Inc (NASDAQ:TSLA), ASML (NASDAQ:ASML), and Alibaba (NYSE:BABA) Group Holding Ltd (HK:9988) set to report later on Wednesday.
Asian tech recovers from DeepSeek rout
Asian technology stocks saw some relief on Wednesday after concerns over DeepSeek sparked a two-day rout in the sector. Japanese tech majors such as Advantest Corp. (TYO:6857), Tokyo Electron Ltd. (TYO:8035) and SoftBank Group Corp. (TYO:9984) steadied, while Renesas Electronics Corp (TYO:6723) added 2.7%.
Sony (NYSE:SONY) Corp (TYO:6758) rose 4.1% after the tech and media conglomerate named President Hiroki Totoki as its new CEO, effective from April 1. Totoki will succeed current CEO Kenichiro Yoshida, who will remain as Chairman.
Gains in tech helped the Nikkei 225 rise 0.5% from two days of steep losses. The TOPIX index rose 0.6%, having largely dodged losses in the Nikkei thanks to its relatively lower weightage of tech stocks.
Tech stocks, particularly chipmakers, were rattled by the release of China’s DeepSeek R1- an AI program that appeared to match the performance of rivals such as ChatGPT, while using older hardware and a substantially smaller budget.
The model raised questions over the hundreds of billions of dollars being poured into AI infrastructure, when companies could instead adopt leaner and less expensive models.
Australian stocks hit near 2-mth high on RBA rate cut bets
Australia’s ASX 200 index rose 0.9% to its highest level since early-December, after data showed CPI inflation grew less than expected in the fourth quarter.
The reading sparked bets that the RBA will have enough cause to begin cutting interest rates from February- loosening local monetary conditions and improving risk appetite.
Analysts at ANZ said the CPI print was enough for the RBA to cut rates by 25 basis points next month.
Still, Wednesday’s data showed underlying inflation remained well above the RBA’s 2% to 3% annual range, limiting the scope of just how much the central bank will be able to cut rates.
Among broader Asian markets, futures for India’s Nifty 50 index pointed to a flat open, as the index struggled to recover from a more-than seven-month low hit this week.